Tax on Superannuation Benefits

Superannuation benefits are comprised of two components, a Tax Free component and a Taxable component.

If you receive a lump sum benefit after reaching your preservation age but before reaching age 60, the tax free component will be tax free and the first $175,000 of the taxable component will also be received tax free. The balance of the taxable component will be taxed at 15% plus Medicare levy.

Superannuation benefits received from a taxed source after attaining the age of 60 are received tax free. This applied to both lump sums and pension payments.

Your superannuation benefit provides you with the flexibility from which a tax effective income stream can be developed. If you receive your benefit as a superannuation income stream (eg a pension) after reaching your preservation age but before reaching age 60, the taxable component will be taxed at your marginal tax rate but you will be able to claim a 15% tax offset.

If you receive your benefit as a superannuation income stream after attaining the age of 60 it will be tax free.

This information is of general nature only and is not intended as a personal advice. It does not take into account your particular investment objectives, financial situation and needs. Before making a financial decision you should assess whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. We recommend you consult a professional financial adviser who will assist you.

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